It is a well-known technique to use comparable sales for determining a listing price for a piece of real estate. The comparable sales information is available in one or more databases. Typically, these databases are only available to real estate agents who are members of an association of realtors or a group of associations. Collectively, these databases are referred to as a Multiple Listing Service (MLS).
Most real estate broker's websites have tools that allow potential buyers to access a limited portion of the listing information in the MLS. For example, potential buyers may view available properties based on location, type of property (single family, lease, vacant land, duplex), property features (number of bedrooms and bathrooms), and price ranges. However, once a potential buyer has identified a property on the website, the potential buyer must usually contact a listing agent or another agent to view the property.
There are also websites that provide a range of values for a home. Some of these websites use tax assessment information in addition to listing information and sales information. Typically, home values based on tax assessments are updated once a year. Home values based on sales and listing information may be updated whenever a new comparable house is sold and listed, respectively, or may be updated on a periodic basis.
While the MLS provides valuable information, the MLS does not efficiently reflect real estate trends. Real estate trends occur over time and cause a noticeable pattern or change in the general direction of the real estate industry. When the trends begin, the impact of the trends is not reflected in the MLS information and tax assessments for several months (e.g., until a sale is updated) causing a “lag” period. During this “lag” period, the MLS information does not provide sellers and purchasers accurate information for them to determine a realistic home value.